Florida Homestead Tax Vote Could Affect 60% of Homeowners

The debate lines are solidifying around Florida‘s proposed homestead tax rollback, with voters just three weeks from deciding whether to radically reform the state’s property tax system.

The proposal to make homestead property tax-free would potentially eliminate taxes on most owner-occupied homes, in an initiative championed by outgoing Gov. Ron DeSantis, a Republican.

If voters approve Florida Question 3, the state’s homestead exemption for owner-occupied houses will rise from $50,000 now to $150,000 in 2027. Then it will rise to $250,000 in 2028. DeSantis estimates this would eliminate property tax for 60% of Florida homeowners.

For the measure to pass, 60% of voters must support it.

The two candidates to replace DeSantis as governor, Democrat David Jolly and Republican Byron Donalds, each have weighed in on the potentially major change to the state’s budget.

Donalds said he supports property tax reform in the state, but he has called for a mechanism to replace tax revenues that local police and fire departments will lose.

Realtor.com® has approached Donalds’ campaign, but did not receive a response to a request for comment on what his plan would be.

“Whether Amendment 3 passes or fails, we are going to reform property taxes in our state with a goal of eliminating homestead property taxes once and for all,” Donalds said during his acceptance speech for his party’s nomination in August.

Meanwhile, Jolly has become increasingly opposed to the measure. He’s concerned that it will deprive local cities of revenue. Instead, he has said he supports a first-time homebuyer exemption.

Jolly, too, did not respond to a request for comment from Realtor.com.

“My concern is I think we all want the math to work,” Jolly told WFLA in September. “But it probably just doesn’t, right? There’s a reason firefighters, police officers have come out against it.”

How the homestead property tax change could work

The homestead residential property tax makes up about a third of property tax revenues to local governments.

Local municipalities and schools took in about $32 billion from property taxes in 2019. But as Florida property values have risen, the collections have, too. Last year, they took in $59.17 billion. At this rate, they’ll collect $83 billion by 2032, the state estimates.

The exemption is limited to permanent residents. In future years, residents who move to Florida will have to remain there for five years before they can claim the tax benefit. And the annual increase in assessed value for nonschool levies would be capped at 5%.

The Florida Chamber of Commerce estimates the largest share of tax goes to school boards—they collected $22.83 billion, or 38.6% of the total last year. Counties took in $20.68 billion, or 35% last year. Cities and independent special districts collected the rest.

But the Florida League of Cities found 85 cities won’t be able to fund public safety at the same level, even if they eliminated every other service funded by property taxes. Pensacola, Fort Myers, and Key West are among them.

What are the potential consequences?

The MidFlorida Credit Union estimated in 2024 that the average homeowner in the state pays around $2,338 a year in property taxes. In more expensive areas like Miami-Dade County or Palm Beach County, taxes can be significantly higher.

Realtor.com has estimated that property values in the state would jump 7% to 9% right away if property taxes were eliminated. That could boost the aggregate value of its housing stock by $200 billion to $250 billion—and make homes less affordable for first-time buyers, says Realtor.com senior economist Joel Berner.

Florida homeowners might be thinking of more immediate relief. The state has some of the highest homeowners association fees in the country. It is also a center of the nation’s property insurance crisis.

But removing the exemption could have long-lasting impacts for those same owners.

On the one hand, cuts to services are going to shrink governments and reduce the services they bring to residents, Neil Schiller, managing partner at Government Law Group, tells Realtor.com.

“Florida is desirable not just for the weather; local and county governments have created an environment that is encouraging for people to come and live in Florida,” Schiller says. “By reducing those services, maybe that isn’t the case in the future and that is something that needs to be considered.”

What’s more, a rise in sales and other taxes would hit the state’s tourism industry.

“What does it do from a tourism perspective if the sales tax goes up so much,” Schiller says. “Add a 10%, 15%, or 20% sales tax, and you will see a decrease in tourism. It will create a significant further divide between the wealthy and the not wealthy. Then where are we?”

Buyer be warned

Florida Chamber of Commerce CEO Mark Wilson says, “It’s going to be pretty hard to get to 60%” on Question 3. But he also notes that the state’s Tax and Budget Reform Commission could return with a new idea in 2028.

Other areas with homestead tax exemptions show examples of how such an exemption will affect homebuyers.

Crystal Olenbush, an agent with Austin Real Estate, warns that homestead exemptions “read like a clean win on the buyer side.” But think beyond the closing table.

“The part buyers don’t ask about is where the missing revenue comes from,” Olenbush says. “If small counties trim services or shift more of the load onto commercial and nonhomestead owners, the neighborhood someone is buying into changes, even though their own bill went down.”

For that reason, she tells clients to price the tax exemption against their specific property and street over 10 years, not just the “headline number.”